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PSP investing in UK real estate, OTPP issuing green bond – Benefits Canada

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The Public Sector Pension Investment Board and Aviva Investors are jointly funding a new office building in Cambridge, England.

The six-storey building has been fully pre-let to a flexible workspace provider, according to a press release that noted construction is expected to be completed in 2023. It’s the latest investment in Cambridge real estate by the partnership, which agreed in November 2019 to invest up to £250 million in commercial property across the 26-acre CB1 Estate.

Read: PSP investing in U.K. real estate; Caisse in medical startup fund, Indian infrastructure

“The continuation of our partnership with Aviva Investors in Cambridge reflects our confidence in the city’s long-term performance potential as a centre of innovation,” said Stéphane Jalbert, managing director for Europe and Asia Pacific real estate investments at the PSP, in the release. “Cambridge’s world-leading education and research institutions act as a hub and anchor for the artificial intelligence and life science disciplines, making the region a key knowledge cluster driving future performance.”

In other investment news, the Ontario Teachers’ Pension Plan’s finance trust is issuing a €750 million 10-year green bond.

An amount equal to the net proceeds from this issuance will be allocated to assets that are environmentally and socially responsible and tackle critical issues like climate change, according to a press release. This marks the inaugural green bond issued under the Ontario Teachers’ green bond framework.

“We believe a transition to a net-zero economy is underway,” said Ziad Hindo, chief investment officer at the Ontario Teachers,’ in the release. “This is expected to bring a host of attractive investments to Ontario Teachers’ that enable and support this transition, with the objective of earning strong risk-adjusted returns while also having a positive impact. OTFT’s green bond issuance allows us to access capital to support the much-needed investments to transition towards a sustainable future.”

Read: OTPP in private equity investments, Caisse encourages diversity with new fund

Meanwhile, the Canada Pension Plan Investment Board, through its wholly-owned subsidiary CPPIB Credit Investments Inc., is committing US$98 million to a bilateral financing transaction in India.

The transaction will support a strategic investment by JSW Projects Ltd. in iron producer BMM Ispat Ltd. and represents the first direct onshore credit exposure in India by the CPPIB, according to a press release.

“The transaction marks a significant milestone for CPP Investments’ credit investment program in India,” said Raymond Chan, the organization’s managing director and head of Asia Pacific credit, in the release. “Emerging markets are a significant part of our long-term strategy and India is a key component of that. We see great opportunities in providing long-term, stable capital to finance India’s growth cycle.”

And the Caisse de dépôt et placement du Québec is part of a consortium of global investors contributing to an $800-million capital raise by Inigo Ltd., a new insurance group.

The funds will provide a capital base for Inigo to open, subject to approvals, in 2021, said a press release. The consortium also includes Enstar Group Ltd., J.C. Flowers & Co., Oak Hill Advisors, Qatar Investment Authority, Stone Point Capital and Inigo’s management team.

Read: Caisse, CPPIB, Ontario Teachers’ invest in insurance company

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Canadian pension funds hunt for pandemic real estate bargains – TheChronicleHerald.ca

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By Maiya Keidan

TORONTO (Reuters) – Canadian pension funds are seeking to boost their real estate investments, betting the slumping property market will recover as the COVID-19 pandemic recedes and office workers and city dwellers return to downtown properties.

Canadian pension funds held $278.7 billion in property assets in 2019, up 4% from 2018, according to the Pension Investment Association of Canada, making them the country’s largest real estate owners.

In a world of slower economic growth, very low interest rates, volatility in equity markets, real estate offers an attractive opportunity for pension funds, which take a long-term investment horizon, say market participants.

“We’re looking for buying opportunities,” said Hilary Spann, Head of Americas, Real Estate at CPP Investments, which manages $456.7 billion. CPP’s real estate portfolio generated 5.1% return for the year ended March 2020.

CPP announced a U.S. joint venture with Greystar Real Estate Portfolio to build multiple separate housing units this month, a deal that was initiated pre-pandemic.

In November, it signed an agreement with Hudson Pacific Properties to acquire an office tower in Seattle. Spann said a lot of buyers that would have been competitive in the Seattle deal were temporarily on the sidelines. “So we were able to step in and pick up that asset at yields that we thought were quite attractive.”

OFFICE VACANCIES CLIMB

As the pandemic forced many staff to work from home, the office vacancy rate in Canada hit a 16-year high of 13.4% in 2020, according to data from broker CBRE. Downtown offices were hit harder.

“I think pension funds are very well aware that…there are times when values dip a bit and vacancies go up but overallreal estate assets are a great part of any pension fund portfolio,” Paul Morassutti, CBRE Canada Vice Chairman said.

CPP’s Spann said while both rental markets and office may suffer in the short-term, it was expected that both markets would return when the pandemic comes to an end.

“Office may fall in the short term but in the long term, as everybody does start coming back to the office, I think it’s fair to say you may see a reversal,” she said, adding that the things that made places like New York and San Francisco vibrant will remain.  

Kristopher Wojtecki, Managing Director, Real Estate at PSP Investments, told Reuters the fund had been increasing exposure in select sectors including single family rental and production studio real estate during the pandemic.

However, Canada’s second-largest pension fund, Caisse de depot et placement du Quebec, is taking a contrarian approach. A spokeswoman for Ivanhoé Cambridge, the real estate subsidiary of Caisse, said the fund is cutting exposure in traditional asset classes and prioritising opportunities in growth sectors which include logistics and residential office buildings among others.

Grant McGlaughlin, partner at law firm Fasken, said he did not see any drastic moves on pension funds getting rid of their real estate portfolios.

“I think that’s the right thesis that there is no point selling into a low,” he said.

(Reporting by Maiya Keidan; Editing by Denny Thomas and David Gregorio)

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Avison Young launches real estate and infrastructure offering – Consulting.ca

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Commercial real estate services firm Avison Young (AY) has launched a new real estate and infrastructure consulting offering in Canada. The offering will be led by new addition Scott Pickles, a seasoned real estate and infrastructure consultant who joins AY from Colliers.

Toronto-headquartered AY has continued to expand its professional services practice as the firm diversifies beyond its traditional domain of commercial real estate management and brokerage – which have been negatively impacted by the pandemic.

Since founding its Americas professional services practice in April 2020 under the leadership of former Deloitte partner Sheila Botting, AY has been working to bolster its capabilities in corporate real estate and workplace consulting, infrastructure consulting, valuation and advisory services, and project management.

“Through growing our distinct service offerings, we are able to deliver on increasingly complex business imperatives our occupier, owner, and investor clients have as they evaluate real estate for their service needs and identify their capital investment requirements,” Botting said.

To this end, the company strengthened its valuation advisory offering in Western Canada earlier this month with the hire of three valuation experts in Edmonton from rival firm Colliers.

AY has now added a new real estate and infrastructure consulting offering in Canada, peeling off another Alberta-based leader from Colliers to head it.

Avison Young launches real estate and infrastructure offeringScott Pickles brings 17+ years of experience providing strategic advisory and infrastructure consulting to the private, public, and not-for-profit sectors. The registered architect has worked as a strategic advisor, sustainable real estate developer, and in various roles within municipal government.

Pickles previously spent two years at Colliers as a senior manager of infrastructure advisory, supporting public and private sector clients across Canada. His consulting work included strategy development, best use analysis, project management, and service and capital planning for a broad range of services – including affordable housing, utilities, and recreation.

Before that, he spent 11 years in the Calgary municipal government, where he was latterly program lead for corporate investment strategy & infrastructure planning. He was also previously the leader of strategic planning for community services.

Before joining the municipal government, he was a development manager at Windmill Development Group, where he managed the development of several residential, retail, and mixed-use projects. Pickles started his career as a project architect at Busby Perkins + Will.

He holds an MBA from the University of Colorado at Denver, a master’s degree in architecture from the University of Calgary, and a BA from The University of Lethbridge.

“Scott’s broad experience and leadership as an architect, developer, and public servant have led him to become a trusted strategic advisor across Canada, and he’s a perfect fit as we grow our professional services consulting across the country,” Botting said.

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Canadian home prices rise again in December: Teranet

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By Julie Gordon

OTTAWA (Reuters) – Canadian home prices rose 0.6% in December from November, the strongest increase for a December since 2009, led by gains in Victoria, Halifax and Ottawa-Gatineau, data showed on Wednesday.

The Teranet-National Bank Composite House Price Index, which tracks data collected from public land registries to measure changes for repeat sales of single-family homes, showed price gains in 10 of the 11 major metropolitan markets.

Prices rose 1.3% in Victoria, 1.2% in Halifax and 1.2% in the national capital region of Ottawa-Gatineau. The index was down 1.1% in Quebec City, the first major market to show a decline in four months.

On an annual basis, the index was up 9.4% in December, the fifth consecutive acceleration and the strongest 12-month gain since November 2017.

Ottawa-Gatineau led year-over-year gains, up 19.7% from December 2019, followed by Halifax at 16.3% and Hamilton at 15.1%. Calgary home prices are down 1.5% on the year.

 

(Reporting by Julie Gordon in Ottawa; Editing by Mark Heinrich)

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